Yemisi Izuora
The Central Bank of Nigeria (CBN) has made a startling revelation saying that
almost one-third of Nigerians cannot access capital to grow businesses, secure savings for the future, or obtain insurance to mitigate risks.
The absence of these services traps individuals in cycles of poverty and stunts national economic expansion, the Bank said.
It said that widespread access to financial services is an enabler of economic activity.
Governor of the Bank, Olayemi Cardoso who spoke at the 2024 International Financial Inclusion Conference, themed ‘Inclusive Growth: Harnessing Financial Inclusion for Economic Development’., observed that the Micro, small, and medium enterprises (MSMEs) which are the backbone of Nigeria’s economy can thrive with improved access to credit, creating jobs and boosting productivity. Moreover, as more Nigerians can save, and invest in education, healthcare, and housing, their quality of life improves, fostering broader economic development.
Accroding to Cardoso, financial inclusion unlocks untapped potential, making it a vital instrument for national progress.
“It is in recognition of this, that the Central Bank of Nigeria (CBN) has been a steadfast advocate for financial inclusion, due to its critical role in achieving macroeconomic stability.” Cardoso said, adding “Since the launch of the National Financial Inclusion Strategy (NFIS) in 2012, the CBN in collaboration with partner agencies has championed policies and initiatives to reduce financial exclusion. These initiatives have been guided by the vision of ensuring every Nigerian has access to affordable financial services, from basic savings accounts to micro pension and microinsurance offered by other regulated non-bank financial institutions to digital payment platforms.”
The Central Bank of Nigeria is keen on ensuring its Financial Inclusion policies and initiatives address the peculiar access to finance barriers for underserved populations, particularly Women, Youth, and MSMEs.
The importance of this mission cannot be overstated, as I have reiterated that financial inclusion is foundational to Nigeria’s sustainable economic development.
In line with its efforts to deepen financial inclusion, the CBN recently introduced new minimum capital requirements for banks.
This strategic move ensures that banks are well-capitalized, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to MSMEs, rural communities, and other vulnerable segments that have previously struggled to access formal financial services.
This policy not only strengthens financial stability but also serves as a catalyst for inclusive growth.
By enabling banks to extend more credit to MSMEs, the Bank enhances job creation and productivity and with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking.
These technologies are key to breaking down geographic and economic barriers, bringing financial services to even the most remote areas.
Financial inclusion, the Governor went on to say, has the potential to unlock significant economic growth, particularly through the empowerment of small and medium-sized enterprises (SMEs), women and other vulnerable segments of the population. SMEs are responsible for over 80 per cent of employment in Nigeria, yet many struggle to access the credit needed for expansion.
Financial inclusion for SMEs is also essential to unlock the full potential of this sector, and the Nigerian government remains committed to supporting these enterprises.
Similarly, women play a critical role in driving inclusive growth.
Research shows that when women are financially empowered, they reinvest in their families and communities, creating broader socio-economic benefits. Yet, women in Nigeria are disproportionately excluded from the formal financial system.
Also, the Central Bank of Nigeria has made significant strides in promoting financial inclusion for Women and youth, particularly through Frameworks aimed at closing gender gaps and regulatory support for digital platforms that offer easier access to financial services for these vulnerable groups.
With programs aimed at financial literacy, the CBN is also empowering young Nigerians to become financially independent, fostering entrepreneurship, and driving economic growth across the country.
One of the most transformative tools for financial inclusion has been the adoption of digital payment channels leveraging mobile technology.
Nigeria’s growing mobile phone penetration provides an unprecedented opportunity to expand access to financial services.
Interoperable payment platforms have enabled millions of Nigerians to send payments, save, and access credit without traditional bank accounts.
Technological advances have democratized financial services, allowing people in remote areas to participate in the economy and this government is committed to creating an enabling environment for these innovations to thrive, through policies that foster competition, innovation, and financial stability.
Cardoso, commended participants at the summit for their unwavering commitment to Nigeria’s financial inclusion goals.
“The journey toward inclusive finance has not been an easy one, but you have remained steadfast in your dedication and passion for building an inclusive economy. Through collaborations and partnerships, we have made significant strides in tailoring strategies, policies, products, and services that promote last-mile access. I would especially like to thank the members of Nigeria’s Financial Inclusion Governance Committee for their dedication and tireless efforts through technical committees and working groups. Your work remains critical to everything we aim to achieve.” he added.